Strong Growth Prospects and Strategic Expansion Drive Buy Rating for Hong Kong & China Gas Co.

Analyst Patricia Yeung of DBS maintained a Buy rating on Hong Kong & China Gas Co (HOKCF – Research Report), retaining the price target of HK$7.20.

Patricia Yeung’s rating is based on the strong performance and growth prospects of Hong Kong & China Gas Co. The company has demonstrated a solid increase in its core profit, particularly in its China gas operations, which exceeded expectations with a notable rise in dollar margins. The Hong Kong gas operations continue to provide a stable cash flow, which is being strategically used to fund expansions in renewable energy projects, aligning with the company’s commitment to reducing carbon emissions.
Furthermore, the company’s financial health remains robust despite a slight delay in its loan reduction plan. The capital expenditure is expected to decrease, which, along with the disposal of non-core operations, should maintain a healthy debt-equity ratio. The anticipated growth in earnings, coupled with a strong dividend yield, supports the Buy rating. Additionally, the potential for improved business momentum in both gas distribution and renewable operations in China further solidifies the positive outlook for the company’s stock.

According to TipRanks, Yeung is an analyst with an average return of -2.3% and a 48.78% success rate. Yeung covers the Utilities sector, focusing on stocks such as Huaneng Power International, ENN Energy Holdings, and China Resources Gas Group.